It’s understandable to have a sense of deja vu when it comes to the fight in Washington over a payroll tax break. In December, Democrats pushed to leave the tax cut in place; Republicans balked; and it led to a fairly intense showdown the week before Christmas. Dems won, but the victory was temporary – the agreement only extended the break through February.
Democrats have already given ground – a surtax on millionaires and billionaires has reportedly been taken off the table – but Dems aren’t willing to go nearly as far as Republicans would like. Since Democrats also believe they have the upper hand in the negotiations, it will be that much more difficult for the GOP to push them around.
This was supposed to be much easier. After a bitter fight in December, GOP leaders were chastened and eager to avoid another defeat. As of mid-January, the prospects for an agreement looked pretty good, in large part because Republicans didn’t want to be on the hook for a middle-class tax increase in an election year.
But the process has deteriorated since, with rank-and-filed GOP lawmakers coming up with new demands.
At issue is a package with a price tag of nearly $200 billion, which would include a payroll tax cut for the rest of the year, an extension of emergency unemployment benefits, and the Medicare “doc fix” on physician reimbursements. Talks will continue today, and if they go poorly, don’t be surprised if Congress scraps its Presidents’ Day recess.